Insurance On Condo Rental
I will be moving out of my condo and renting it out.
1. What is the minimum liability coverage I should get?
2. How about other types of coverage...stove, refrigerator, washer dryer, walls etc.
3. How does an existing master HOA policy figure into the mix?
3. Overall, what should I be concerned about when shopping for insurance? (renter's belongings vs. my property, etc,)
Thanks for the input,
Paul
Isn't insurance covered in your association fees? I was of the opinion that to avoid fingerpointing that one policy covers the entire building (at least around here).
Since they are your appliances, you know what condition they are in and can best assess the need for home warranty insurance. I usually keep a home warranty policy on for about a year after I acquire a property and replace or repair what I can under the policy.
Your insurance is not going to cover certain losses of your tenant. For example losses due to theft is not likely covered. Suggest they get renter's insurance.
1. What is the minimum liability coverage I should get?
Zero. You don't get a policy on the condo to cover you from someone slipping in the bath tub, you protect yourself from being sued by legal entities such as a corp or a trust putting the property in it. The liability coverage you might consider is a umbrella policy that is covering you from any general liability whether it is from a tenant, or getting in a car wreck.
2. How about other types of coverage...stove, refrigerator, washer dryer, walls etc.
Zero. Wear and tear is now part of your life when you own a rental property. Distruction is covered under the security deposit. Normal wear and tear and something breaking is part of your life now.
3. How does an existing master HOA policy figure into the mix?
It doesn't as far as I know. Check the HOA and the policy.
3. Overall, what should I be concerned about when shopping for insurance? (renter's belongings vs. my property, etc,)
The renters worry about their own stuff, they can get their own policy. You worry about what happens if the place burns down.
A condo does have a master policy that covers the whole building, and the condo association pays that. However, be sure to look at your condo agreement. I've seen some that state the condo owns and insures the building, from the exterior frame out, but the tenant owns and insures from the drywall in. That means, you may need to get a small insurance property that covers the interior walls, fixtures, etc. I would guess that $10,000 would cover that. Along with that policy I would purchase liability insurance. An umbrella might suffice, but you can probably purchase $100,000 liability along with the condo-owners form.
BTW, "Wear and tear" were mentioned. Wear and tear are not a peril covered by an insurance policy. The insurance policy would be for covered perils. Fires and such...
Just a few additions to what has already been stated.
I always provide a 1 yr warranty and the first service call fee. Hey, I'm not a landlord, I'm an investor. You got a
problem -don't call me, call the service company.
I include in my lease that the applicances are not part of the agreement and they're there for the convenience of the tenant. If she wants to use them fine but -no repairs of appliances by the landlord.
I have the tenants get a renter's insurance policy covering contents and liability and have them name me as
an additional insured. I need the certification with 30 of occupancy.
You may have liability protection to a certain extent by entity-creation, however, this does not keep you from getting sued. If your entity is sued and you don't have liability insurance, you are paying the attorney's fees for the defense, regardless of whether you are liable or not. Get as much liability insurance that you need to protect your (or your entity's assets).
P&C insurance is getting harder to find and more expensive, so you'd better start finding a willing ins. carrier co. NOW.
You'll find a NOO condo, IMHO, somewhat difficult to place ins. on, with any new agent...so start with the co./agent that has your HO policy & car ins. & work through them. That agent might do it because he's already making money off your biz, whereas a new agent would probably not even return your phone call.
Good luck getting this ins. coverage.
Good point, John. Also consider a commercial policy, which is needed if the condo is owned by a (your) business entity. If you own it personally and "extend" the liability coverage from your home, you are putting your homeowners insurance at risk for what is truly a business risk...